UPDATE 1-Tesco bank to focus on its most loyal shoppers

* To focus initially on 15 million Clubcard holders

* Tesco bank has 6 million customer accounts (Adds detail, backgrond)

LONDON Nov 20 (Reuters) - Tesco (TSCO.L), Britain's biggest retailer, will initially focus on its most loyal shoppers as it seeks to build its new banking business, it said on Friday.

The supermarket group, on the second day of presentations to investors about its ambition to expand into retail services, said Tesco Bank would initially target the 15 million members of its Clubcard customer loyalty scheme.

In presentation slides on its website, Tesco said just 10 percent of Clubcard holders had a Tesco credit card, currently its biggest financial business, while only 4.2 percent had Tesco car insurance and 2.2 percent a Tesco savings product.

Tesco unveiled plans in July 2008, when it bought Royal Bank of Scotland (RBS.L) out of a financial joint venture, to double annual profits from its retail services businesses, such as banking, to 1 billion pounds ($1.7 billion) over several years.

It has since gone on a staff recruitment drive, started testing bank branches in stores and signed an insurance joint venture with Fortis FOR.BR, and currently has around 6 million customer accounts.

Analysts have speculated whether it might be interested in buying assets from bailed-out banks like Lloyds (LLOY.L), RBS and Northern Rock (NRKx.L).

However, Tesco Bank chief executive Benny Higgins said on Tuesday he was focusing on organic growth, with plans to introduce a Tesco current account and possibly also mortgages over the next couple of years. [ID:nLH453400]

Tesco said on Thursday it was also aiming to build a telecoms business generating 2 billion pounds a year of sales over the medium term. [ID:nLJ91702]

At 1140 GMT, its shares were down 0.6 percent at 422.15 pence, in line with the DJ Stoxx European retail index .SXRP. ($1=.6002 Pound) (Reporting by Mark Potter; Editing by Jon Loades-Carter)